[quote=“Pantagruel”]Well, if SunWave is now paid off, we can only hope that the Colonial Coal lawsuit is either heard and CPR wins, or a settlement is made. I just did a fast Google search and could not find anything recent.
There was a flurry of court filings last month which included some rather startling new allegations of fact by Watco. On Sept 9 Watco filed an Amended Notice of Claim which among other things makes the following statements, which I am quoting verbatim from the numbered paragraphs:
"40. A new City Manager was hired by the Defendant Prince Rupert in or about May 2013. The City Manager was responsible for representing the Defendant Prince Rupert in its dealings with Watco, and for the completion of the Definitive Agreement.
Following the appointment of the new City Manager, the Defendant Prince Rupert ceased negotiating in good faith with the Plaintiff WatCo to conclude the Definitive Agreement and unilaterally, unfairly and without adequate warning imposed arbitrary deadlines and conditions on the completion of the Definitive Agreement for the improper purpose of defeating the sale of the Watson Island Property to Watco.
The City Manager expressed the opinion to Watco that the agreed upon purchase price was insufficient and accordingly began to actively work to defeat the deal between Watco and the Defendant Prince Rupert, including by beginning to speak to other prospective purchasers for the Watson Island Property.
In furtherance of this scheme to defeat the sale, or about October 2013 the Defendant Prince Rupert began to place unreasonable conditions on Watco, including advising the Plaintiff WatCo that it wanted the negotiations for the sale of the Watson Island Property concluded soon, but no specific date was identified. In placing this condition on Watco, the Defendant Prince Rupert knew that the delays in completion of the Defintiive [sic] Agreement were due to its own delay and neglect in providing clear title to the Watson Island Property and to the Sunwave litigation. *
On or about December 17, 2013, the Defendant Prince Rupert, advised in relation to the negotiations to deal with the assets of Sun Wave Forest Products Ltd., that, subject to Sun Wave Forest Product’s agreement, the Defendant Prince Rupert imposed additional unreasonable conditions and now preferred WatCo to purchase Sun Wave’s assets at a purchase price anticipated to be approximately $3,000,000. [the crossed out paragraph number from the original filing has been deleted]
Unbeknownst to Watco, the Defendant Prince Rupert was by this time already in secret discussions with other potential purchasers and, through its representative the City Manager, was actively withholding from Watco the fact that it was secretly preferring to sell the Watson Island Property to other parties and was advising senior officials of the Defendant Prince Rupert that he had developed secret “irons in the fire” for the purchase of the Watson Island Property in place of Watco.
On January 21, 2014 the Defendant Prince Rupert’s officials were meeting with other interested purchasers despite the fact the Oral Exclusivity Agreement remained in effect.
The Defendant Prince Rupert failed to use reasonable efforts to satisfy the conditions for the purchase of the Watson Island Property, impeded the Plaintiff WatCo’s efforts to satisfy the conditions for the purchase of the Watson Island Property, and secretly preferred other purchasers."
The following new statements in the “Legal Basis” part of the Amended Notice of Claim seem to get to heart of the matter:
"6. The Defendant further owed the Plaintiff WatCo a contractual duty of good faith and honest performance pursuant to the Conditional Offer to Purchase, the Exclusivity Agreement and/or the Oral Exclusivity Agreement that required that it use reasonable efforts to satisfy the conditions for the purchase of the Watson Island Property, that it not impede the Plaintiff WatCo’s efforts to satisfy the conditions for the purchase of the Watson Island Property, that it negotiate in good faith towards the completion of a Definitive Agreement, that it not secretly prefer other potential purchasers of the Watson Island Property; and that it not unilaterally, unfairly and/or without adequate warning imposed arbitrary deadlines on the completion of the Definitive Agreement.
- The Defendant Prince Rupert breached those duties by failing to use reasonable efforts to satisfy the conditions for the purchase of the Watson Island Property, by impeding the Plaintiff WatCo’s efforts to satisfy the conditions for the purchase of the Watson Island Property, by failing to negotiate in good faith towards the completion of a Definitive Agreement, by secretly preferring other potential purchasers of the Watson Island Property, and by unilaterally, unfairly and without adequate warning imposing arbitrary deadlines on the completion of the Definitive Agreement."
In an Amended Response dated September 21 the City denied all of the allegations of fact quoted above as well as other allegations and legal arguments.
As previously reported here, in August the BC Supreme Court denied the City’s application to cancel the Certificates of Pending Litigation and declined to declare that there was no binding agreement between Watco and the City. Watco was ordered to pay $3.2 million into Court as security while those issues go to a full trial. < viewtopic.php?f=3&t=22573&p=203833&hilit=watson+island#p203833 >
The City applied to have the CPL’s cancelled on the grounds that the funds had not been paid into Court by the deadline, but on Sept 23 withdrew that request. That suggests that Watco has put up the necessary funds and the CPLs remain in effect, which effectively prevents the City from selling the property.
What can we make of all of this? Legal battle has been well and truly joined.*